After Workfare, the Olympics fiasco is another rocket fired into the side of the HMS Private Sector Efficiency.

Occasionally, reality has an aggressive way of bringing government rhetoric down to earth, like a malicious Tour de France spectator with a handful of tacks, watching Cameron approach on his Barclays bike.

For most of last week, talk has been of Olympic Security and the failings of G4S. The Government are making tough noises about penalties for failure to perform on the contract. G4S, in reply, not-so-subtly hints at the sudden rise last December in the number of security personnel required by LOCOG, from 2,000 to 10,000. The notion being, presumably, that thorough bag searches are a close substitute for non-incendiary social and foreign policies.

Another interesting debate, however, is to be had on the potential link between G4S’s failure and the scandal surrounding the deployment of "workfare" staff around the Queen’s Jubilee. The news of unpaid jobless being sent by coach from Bristol and made to spend the night under London Bridge was met with outcry[3]. It is almost impossible to dismiss the collapse of such schemes under the weight of public opinion and the sudden G4S realisation that they will not be able to have the numbers promised, as mere coincidence.

Many folks misunderstand these schemes. They appear to believe that the employer will pay a participant’s Job Seekers' Allowance for a number of weeks while they work for them. This is incorrect. As can be easily gleaned from the literature on this[4], it is the state which continues to pay:

“Participants will remain on benefit throughout the period of the sector-based work academy and Jobcentre Plus will pay any travel and childcare costs whilst they are on the work experience placement.“

We know that G4S is one of the participants in the DWP’s Work Programme from Freedom of Information request 3238/2011[5]. We know that Close Protection UK – the company at the centre of the Jubilee fiasco – are themselves sub-contracted to G4S for Olympic fire safety stewards[6]. We know that workfare placements for the Jubilee were offered as training with the possibility of lucrative Olympics jobs on completion. We know that G4S defended Close Protection UK[7] as an approved contractor who required no further vetting. We know that back in February G4S were advertising[8] Olympic Recruitment with the words “not a job vacancy but you might find it interesting”.

How many thousands of jobless were G4S planning to deploy, either directly or through sub-contractors, before workfare schemes became PR-toxic? Here is a company getting paid an average of £28,000 for each of the 10,000 employees required. With unemployment standing at 2.6m, it is incredible to suggest that staff could not be found and trained for such a well paid seventeen-day engagement.

Much more likely is that the company miscalculated in its attempts to maximise its profit, over-estimated its ability to do things “on the cheap” and the availability of free labour, and spectacularly failed. Another rocket fired into the side of the HMS Private Sector Efficiency from atop a London council block.

The Olympic Security scandal reveals the issues behind workfare schemes with crystal clarity. There was plenty of money available. There are no permanent jobs beckoning at the end of the Olympiad. The demand side is fixed – 10,000 is the requirement; no extra jobs will be created by deploying training schemes.

It is a mystery that while traditional right-wing commentators like the TaxPayers Alliance and the Mail object to funding an individual’s benefits, they appear quite happy to cross-subsidise huge conglomerates. Such programmes do not end the “something for nothing” culture. They elevate it to the corporate level. They allow companies like G4S to get something for nothing on a grand scale. We might be paying for these security staff twice – by paying for their training through direct contract fees to G4S and again through these schemes.

Another, seemingly unrelated, story also captured the headlines last week: the first convictions under Section 71 of the Coroners and Justice Act 2009 for “holding a person in servitude” and “forced or compulsory labour”. (We were also told – every hour on the hour – that the guilty parties were a family of Travellers. In combination with the recent child grooming trial and a Mail story about a “refugee rapist”, this proves that the provenance of a criminal is especially newsworthy if it is a minority.)

I studied the sentencing remarks[9] of Judge Michael Kay QC with interest. "The promise of pay was a monstrous and callous deceit”, he said. “The conditions were squalid and at times they were starving. The way in which these defendants, for their own financial benefit, brutally manipulated and exploited men who are already plumbing the depths of despair is pure evil.”

And I think to myself, what is the difference, really, between the victims of that case and a group of jobless people being herded on to a coach from Bristol, under threat of losing their benefits, dumped underneath London Bridge to spend the night, with no food or toilet facilities, made to strip in public to change into their uniform, until having to stand there in the lashing rain the next day to steward a celebration of privilege?